Potential Trade Idea: Long Heating Oil/Short NatGasRecently our Unum Trading Desk analyst, Lester Davids identified a potential pairs trade on Heating Oil and Nat Gas.
"I am bullish on NatGas with a medium term view. We recently saw a break of the downward trend with an inverse head and shoulder developing. In the short term though, we could see a pullback following the breakout. On that basis, one could be short NG and Long Heating Oil."
We decided to wait for a better entry level on the medium term trade, rather than playing the ultra-short term reversal. It is now approaching our entry point.
On the NG chart:
"NG is approaching incline support around the $2.77 level. We also have horizontal support near $2.74. Potential buy/long opportunity. Keep on the watchlist for possible entry."
For the pair we want to LONG NG and SHORT Heating Oil.
If you want more details on the trade email tradingdesk@unum.co.za
